OSHAKATI – Following a comprehensive review of global, regional and domestic economic developments, the Bank of Namibia’s monetary policy committee decided to maintain the repo rate at 7.75%.
Bank of Namibia governor Johannes !Gawaxab made the announcement yesterday at the Oshakati branch in the Oshana region.
"We want to continue safeguarding the peg between the Namibian dollar and the South African Rand, and supporting the domestic economy," he added.
However, !Gawaxab said domestic activity is projected to slow down to about 3.3% for 2023 as a whole, compared to 4.6% registered in 2022.
Meanwhile, on a monthly basis, annual inflation declined to 4.5% in July 2023 from 5.3% in June 2023.
!Gawaxab indicated that the annual growth in Private Sector Credit Extension (PSCE) improved to 3.0% in June 2023 from 2.6% in April 2023, albeit remaining lower by historical standards.
He explained that the rise in PSCE growth was attributed to an increase in the demand for credit by the household sector. “Namibia’s average inflation rate rose to 6.2% during the first seven months of 2023, relative to 5.3% during the corresponding period in 2022. The rise in the average consumer prices continued to be predominantly driven by food and housing price inflation.”
The governor indicated that the projection for overall inflation has been revised downwards, and it is now expected to average 5.6% in 2023 – 0.4 percentage points lower, compared to the forecast at the previous monetary policy committee (MPC) meeting.
The revision was mainly on the back of more-than-anticipated deflation in the transport category.
!Gawaxab said since the last MPC meeting, inflationary pressures in the monitored economies generally subsided.
“Among the AEs [Advanced Economies], inflation eased in the United Kingdom and Euro Area, while it increased slightly in the US and Japan. Inflation also ticked higher in several key monitored EMDEs [Emerging Market and Developing Economies], although China recorded deflation and the South African inflation rate slowed,” he said.
Going forward, the governor said, global inflation is expected to remain sticky, despite moderating somewhat.
“Consistent with moderating inflation, a number of monitored central banks kept their policy rates unchanged at their latest monetary policy meetings, including the South African Reserve Bank.”
However, the US Federal Reserve, the Bank of England, the European Central Bank and the Central Bank of Russia raised rates since the last MPC meeting to continue taming and anchoring inflation.
The MPC will meet again on 23 and 24 October 2023.
- vkaapanda@nepc.com.na